The insurance sector will be in the spotlight this week when Aviva, RSA and motor specialist esure step forward with half-year results.
Aviva chief executive Mark Wilson will want to show the City his turnaround plan has not lost momentum when he unveils the insurer’s half-year results on Thursday.
The country’s second largest insurer, which has 31 million customers worldwide, is expected to post an operating profit up a modest four per cent to £1.05bn, compared to a year ago, according to brokers at Panmure Gordon.
Analysts at JPMorgan Cazenove expect cost savings the firm has made to be partly offset by winter storms claims in Canada and the UK, a strong pound and the lower sale of annuities for pensions as a result of changes made in the March Budget.
Aviva’s share price lost five per cent or £550m on March 19 when the Chancellor made his surprise announcement that pensioners did not have to buy an annuity to draw their pensions.
The annuity market is worth around £12bn per year and the move is expected to impact 18 million people.
RSA chief executive Stephen Hester will update the market on the rescue plans for the More Than insurer when it also posts H1 results on Thursday.
The former Royal Bank of Scotland boss joined the firm in February following the resignation of Simon Lee in the wake of three profits warnings and the group’s Irish crisis when a £200m black hole was discovered in the division’s finances.
Since he took over he has successfully launched a £775m emergency rights issue, and raised around £600m by selling non-core businesses in regions that include Poland, the Baltics and China.
Sheilas’ Wheels owner esure is expected to reflect the pressure the industry faces over falling motor premiums when it reports its half-year results today. The car and home insurer, which employs 1,400 and has more than 1.5 million customers, is expected by the market to post flat profits before tax of £56.2m.